I have this 84′ Porsche 944 that I bought for $3600 and spent like another $3000 on restoring the engine and upgrades. Say someone hit my car and completely totalted it, how is it decided for how much money I would get to replace that car and how would that work? I have full insurance on the car.
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A “total loss” is a financial concept. They would look in a value guide to determine what the car is worth. If it cost more to repair than it’s worth, then they’d just write it off, and you’d have to buy another one. They will pay you the value printed in a book somewhere.
Value guides work okay for a 3 year old car, but they begin to get VERY fuzzy once you start talking about a restored car, or any kind of collector’s item. For example, a 1968 Mustang can vary from $500 to $500,000 in value, and that’s a mighty big range to have to deal with.
In your case, two things to remember: 1. Sunk cost has nothing to do with it. Nobody cares how much you spent on it. 2. If you don’t think the values you can find documented are accurate for your car, you may want to talk to your insurance agent about this. There are some differences between collector car insurance and regular car insurance, and at some point with an old car you may want to switch over.
OUCH! The insurance will verify the CURRENT market value of the car and compare it to the price other models like yours are selling for NOW. The insurance will cover only original parts…NOT aftermarket or “bonus” parts you put in.
The insurance company uses the Kelly Blue book value and whatever receipts you can provide for the restoration costs.
They will pay you market value> Unless you make a price difference with them on replacement cost Or accrual cash value>
If you have regular insurance then they give you blue book value (KBB.com) or average resale value based on your area whichever is greater. You can purchase SPECIAL insurance where you specify the dollar amount of coverage, this of course costs a lot more.